Not that it’s going to have any impact on Geithner at this point, but it again shows how poorly he implemented the bailouts during his time at the Fed. It also makes you wonder how Obama even chose Geithner. Many people like to lay all of the blame on Geithner and yes, there’s plenty of blame to hand out. It still doesn’t change the fact that he was chosen and has been supported by Obama, who is the person in charge. As fair as the criticism of Geithner may be, it’s difficult to see how this doesn’t reflect poorly on Obama. How is it possible to have any faith in Geithner?
The report says New York Fed officials mismanaged the negotiations with other banks, removing the threat that AIG would go bankrupt and bowing to a demand from French regulators that French banks holding AIG’s debt insurance be paid in full.
The initial bailout “was done with almost no independent consideration of the terms of the transaction or the impact that those terms might have on the future of AIG,” the report says.
As a result, billions more than necessary went to U.S. banks including Goldman Sachs Group Inc.; Merrill Lynch, now part of Bank of America Corp.; and Wachovia, now part of Wells Fargo & Co.; and European banks including Societe Generale, Deutsche Banke, UBS and Calyon, it says.